American Electric Power (AEP) announced a five-year, $54 billion capital expenditure plan, marking a 25 percent increase from previous projections. The plan focuses heavily on transmission infrastructure to support growing demand from data centers and other large power consumers.
To fund its build-out, AEP is considering further asset sales, cost-cutting through management restructuring, and equity strategies. CEO Bill Furman hinted at possible sales but provided no specific details.
AEP expects a 20-gigawatt load increase by 2029, a 60 percent jump from its current peak, primarily driven by data centers. This demand surge reflects the power-intensive needs of AI-driven data centers and similar facilities.
The company exceeded third-quarter profit estimates as increased electricity use by data centers boosted commercial demand. AEP’s commercial load grew over 10 percent year-on-year, with projected growth averaging 20 percent annually over the next three years, Reuters news report said.
U.S. electricity demand is expected to reach unprecedented levels by the end of 2024, with data centers potentially consuming up to 9 percent of the country’s total power by 2030 as AI and other technologies expand, according to the Electric Power Research Institute.